Texas lawmakers begin their 89th session in Austin Tuesday. The state legislature meets for 140 days every two years.
Monday, Comptroller Glenn Hegar, the state's chief accountant, released his revenue estimate for the next budget during a discussion hosted by the Texas Tribune. Hegar says lawmakers will have $194.6 billion in revenue available with most coming from sales and energy taxes.
Hegar says Texas had about 1.1% more revenue available two years ago, but the state still has $32.7 billion available in its treasury from that budget.
"It is a good position to be in where we're at today compared to a few of the other states, where they're actually negative," he said.
In addition to unspent money from two years ago, the state's Economic Stabilization Fund, known as the "rainy day fund," has $23.8 billion.
Hegar predicts the state's economy will continue to grow but at a "more moderated" pace.
"We don't forecast a recession," he says. "We just don't think it's going to quite grow in the next year or two at the same pace."
Hegar says global politics and the possibility of unforeseen issues like natural disasters could change the forecast. He says a conservative revenue estimate where the state might overperform is preferable to the opposite.
"We don't know exactly what's going to happen, so you're better off not trying to get too far ahead in those estimates into policies," he says. "They're not just the flip of a switch. They take a while to implement."
Sales tax collections represent 58% of revenue, and Hegar says they have increased from $29 billion ten years ago to more than $50 billion now.
"Even with modest growth, it is a significantly larger base," he says. "That does mean there's growth in the current budget even though they're pretty conservative estimates on our part."
For the rainy day fund, Hegar says the state is investing the money and "earning over a billion dollars in investment returns." He says its balance could grow to $40 billion by 2035.
After Hegar released his estimates, lawmakers were split on their priorities for the budget.
"With this surplus, my first focus is to continue to cut property taxes and increase teacher salaries, along with making smart, one-time investments to ensure our budget is sustainable moving forward and that our state is prepared for the future, as we did with last session's surplus. For example, Gov. Abbott and I agree we must add new dispatchable power to our grid so the Texas miracle can continue," Lieutenant Governor Dan Patrick wrote in a statement.
State Representative Gene Wu, the chair of the Texas House Democratic Caucus, says the legislature should use the money to invest in education, health care and infrastructure.
"While these revenue projections echo 2023's 'once-in-a-lifetime' cash balance, this time we must deliver different results. We cannot afford another session where Republicans sell out to voucher scammers while our neighborhood schools struggle," he wrote.
Hegar, the comptroller, says part of the balance from two years ago comes from $4.5 billion that had been set aside for school vouchers.
"The enacting legislation didn't pass, so therefore, that 4.5 billion didn't get put into the funding formulas for public education," he says. "I would imagine as the legislature deals with public education finance this session as well as education savings accounts, I don't know exactly what they do, but I would assume that 4.5 billion is going to be added back into the budget in some mechanism for public education."
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